Homeowner
warranties
A home warranty pays repair or
replacement costs for the mechanical systems
and built-in appliances that break down in a
home. Warranties can be purchased by either
the buyer or seller. When the seller is
paying for the warranty, it is usually paid
for and goes into effect at closing. The
coverage period is normally one year. There
are a lot of companies offering home
warranties and coverage of individual
policies can vary widely. Usually, central
heating and air conditioning systems,
electrical, plumbing and major appliances
are covered. It's important that you read
the policy closely and understand what is
and is not covered. The cost for a one year
home warranty typically runs between $300
and $600, depending on the size of the home
and the specific types of coverage. In
addition to the policy premium, there is
normally a deductible of $50 - $75 to pay
when making a repair claim.
There are some very good reasons to pay for
a home warranty when selling your home.
Providing a warranty can help set your home
apart from the competition. Buyers will
appreciate having a warranty and will feel
more comfortable about buying your home
without worrying about hidden
problems. Providing a warranty can even
result in a higher price, offsetting the
cost. Certainly it can make it easier for a
buyer to make an offer. These assets make
the home warranty an excellent marketing
tool.
In addition to marketing advantages, you
could also avoid getting sued down the
road. When a major appliance, heating or
air conditioning system goes bad shortly
after a home is sold, it's not uncommon for
the buyer to blame the
seller. Unfortunately, this can and does
lead to lawsuits. Providing a home warranty
with the sale of your home can go a long way
towards preventing these types of suits. In
some areas where lawsuits are particularly
common, almost all homes are sold with a
home warranty included.
If you are buying a home and it doesn't come
with a warranty, you may want to consider
paying for one yourself. The first year
after buying a home is a time when most
people don't have a lot of cash on hand to
cover problems that might arise. Having a
one year home warranty in place can provide
peace of mind during this time, and if
something does break down, could really save
your budget.
